NYRA budget projects $2.2 million profit for 2016

NEW YORK - An increase in prices for Belmont Stakes Day, further development of its advance deposit wagering platform - including potentially expanding nationally - and the closure of the Aqueduct backstretch for approximately four months are among the initiatives the New York Racing Association hopes will make it profitable for a third consecutive year in 2016.

NYRA has conservatively budgeted for $2.2 million profit in 2016 - exclusive of revenue derived from video lottery terminals. NYRA, which realized a $1.6 million profit in 2014, budgeted for a $2.2 million profit in 2015, but has said it anticipates realizing a $4 million profit due to having a Triple Crown possibility at the Belmont Stakes and a record-setting Saratoga meet.

While NYRA is not budgeting for either of those two things to occur again in 2016, it does hope to build upon its prior successes in the coming year. NYRA approved its 2016 budget at a meeting of the Board of Directors held Wednesday in Manhattan. The increased pricing for Belmont Stakes Day was not discussed in the meeting.

NYRA has benefitted from a Triple Crown opportunity at each of the last two Belmont Stakes. But NYRA has tried to build the day into a major event sans that opportunity. In 2014, NYRA added more stakes races to the card, expanded its seating options, offering more premium packages. In 2015, NYRA again created a big day of racing, putting 10 stakes on the card, and again expanded seating and entertainment options. Also, NYRA bundled tickets for Friday and Saturday’s cards as part of a three-day Belmont Stakes Festival which began on Thursday.

Seating and general admission prices were raised in 2015 and are expected to be raised again in 2016. In 2015, general admission prices went from $10 to $15.

Chris Kay, NYRA president and chief executive officer, would not provide specifics Wednesday, saying those increases would be announced in January.

“We’ve gone through and compared our prices to the Preakness and to the Breeders’ Cup and to the [Kentucky] Derby and we’ll [announce] all of that in January,” Kay said Wednesday. “I think we had the greatest day of racing in America on Belmont Stakes Day. We started in 2015 with the idea of combining the Friday and Saturday events for certain seats. We’re going to have more of those seats combined in 2016.”

Most of Wednesday’s board meeting was devoted to discussions of what a huge success 2015 was with credit given to the Triple Crown try by American Pharoah and the glorious weather that helped Saratoga set an all-sources handle record of $697 million.

According to NYRA, handle at the Belmont fall meet was up 7 percent over last year and handle at Aqueduct through Sunday - where great weather enabled it to conduct 73 turf races - was up 4.3 percent for the main track season.

One area of growth for NYRA in 2015 was through its Internet wagering platform, NYRA Rewards. For the three-month period alone - July, August and September - Internet wagering was $50.3 million, up 23.6 percent from $40.7 million handled for the same period in 2014.

NYRA hopes to expand its NYRA Rewards program, exploring the possibilities of expanding outside the state of New York.

“As far as the internet is concerned the statute in New York has a 9 percent tax on such activity whereas the statute in Oregon is .25 percent so there is an incredible difference between what the tax amount is paid by TwinSpires and Expressbet than what would be paid by us under the current situation,” Kay said. “So one way or the other we would like to compete on a level playing field.”

NYRA plans to close the Aqueduct backstretch from May 8 through Aug. 31, which would save the company $582,000. After planning to close it for at least that length of time in 2015, NYRA only closed Aqueduct‘s stabling area during the Saratoga meet this year. The addition of 250 to 300 stalls at Belmont Park and the completion of a new dormitory set to open later this month at Belmont will enable NYRA to close Aqueduct for a longer period of time.

Kay said there is no plan to shutter Aqueduct’s stabling area on a permanent basis.

The construction of two dorms at Belmont is part of $44.1 million in capital expenses NYRA has in its 2016 budget. Among those projects are upgrades to the At the Rail Pavilion at Saratoga as well as new escalators and elevators, additional backyard video boards, and upgraded restrooms.

NYRA uses revenue from the VLT operation at Resorts World as its primary funding for capital expense projects.

NYRA projects to get $118.5 million from VLT revenue in 2016, of which $61 million will be earmarked for purses ($912,000 of that goes to jockey health insurance), $32.9 million for capital improvements, and $24.6 million for operations. There is a $16 million carryover from the 2015 capital expenditure budget that goes toward paying for the 2016 projects.

NYRA said that it has met with representative from Genting, which operates Resorts World Casino on the track grounds to discuss several issues of concern. One, obviously, is NYRA’s bid to regain control of the concession on the racing side of the building where prices are extremely high.

“We had a very good open meeting like none has existed in the past,” Kay said. “We’re moving in the right direction. Hopefully, we’ll be able to resolve some or all of our issues and there are number of them.”

Kay mentioned the lack of signage for Aqueduct on the major thoroughfares outside of Aqueduct as another area of concern.

NYRA executives eligible for $450,000 bonus

Steve Duncker, a former NYRA chairman and head of the current board’s Compensation Committee, said there will be a bonus pool of $450,000 that could be divided among nine senior executive officers of NYRA provided certain metrics are met as it relates to racing-related revenue.

In each of the past two years, Kay has earned a $250,000 bonus on top of his base salary, which in 2014 began at $300,000.